Kentucky, New York Looking Into Zayat Loans

Kentucky, New York Looking Into Zayat Loans
Photo: BenoitPhoto.com
Ahmed Zayat

Officials with the Kentucky Horse Racing Commission and New York State Racing and Wagering Board said March 2 they are looking into loans made by Ahmed Zayat to two brothers convicted in connection with illegal bookmaking.

Marc Guilfoil, deputy executive director of the KHRC, said the probe was initiated following published reports about loans totaling $605,000 made by Zayat to Jeffrey and Michael Jelinsky in 2006 and 2007. Joe Mahoney, a spokesman for the NYSRWB, contacted The Blood-Horse to say New York regulators are doing the same.

Zayat obtained a 2010 racing license last November, Guilfoil said. Kentucky regulations prohibit licensed owners from associating with convicted bookmakers.

Guilfoil said the KHRC routinely looks into matters such as the Zayat loans when there is a possibility that the state’s racing rules and regulations have been violated.

Mahoney said the NYSRWB began collecting documents after a story appeared in the New York Times, which first reported the ties between Zayat and the Jelinsky brothers.

"(NYSRWB chairman John Sabini) told the staff to conduct a thorough investigation," Mahoney said.

The revelations about the loans to the Jelinsky brothers are contained in documents filed in connection with the Chapter 11 bankruptcy filing by Zayat’s Zayat Stables.

Under the category of "other liquidated debts owed to debtor," the bankruptcy filing for Zayat’s Zayat Stables shows 12 outstanding loans. Included were a $450,000 loan to Jeffrey Jelinsky Sept. 27, 2007, and a $155,000 loan made to Michael Jelinsky Sept. 27, 2006. Additional loans included $50,000 to B. Jelinsky (Oct. 2, 2007) and $2,500 to L.A. Jelinsky (Feb. 1, 2008).

According to the Times, the horse owner said the payments were loans and were not related to betting.

Zayat Stables filed for Chapter 11 bankruptcy after the leading racing stable was sued by Fifth Third Bank to recover more than $34 million in outstanding loans. Zayat, who races Eskendereya, a leading contender for this year’s Kentucky Derby Presented by Yum! Brands (gr. I), contends the bank’s loan officers misled him into believing his loans would be renewed.

Michael and Jeffrey Jelinsky are serving prison sentences of 15 months and 21 months, respectively, after pleading guilty to illegal bookmaking in 2009.

The brothers pleaded guilty in connection with their illegal gambling business that operated out of Nevada, according to published reports leading up to their convictions. Among the assets confiscated by federal authorities from the Jelinsky brothers was $1.5 million traced to International Racing Group, an off-shore betting operation that was hit with federal charges in 2005.

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